On August 28, 2024, New York State's new law governing workplace-related contracts with freelancer workers – known as the Freelance Isn't Free Act (FIFA) – will take effect. FIFA is designed to protect freelancers, i.e., independent contractors, from non-payment, late payment, and retaliation by hiring parties. It also imposes new requirements on hiring parties to provide written contracts, timely payment, and recordkeeping for freelance workers.
Background
In 2016, New York City enacted its own Freelance Isn't Free Act, which was one of the first laws in the country to provide protections and remedies for freelance workers (and which we detailed here). The state law largely mirrors the city law, but with some key differences. For example, the state law excludes certain categories of workers from its coverages, including sales representatives, attorneys, licensed medical professionals, and construction contractors.
FIFA further explained
FIFA applies to contracts between a hiring party and a freelance worker for services of at least $800, either by itself or when aggregated with all contracts between the same parties over a 120-day period. Under FIFA, "hiring party" is any person who retains a freelance worker to provide any service, except for federal, state, local, and foreign governments and a "freelance worker" is any natural person or organization composed of no more than one person, that is hired or retained as an independent contractor by a hiring party.
FIFA requires hiring parties to provide written contracts to freelance workers, either physically or electronically, and to retain a copy for at least six years. The written contracts must include, at a minimum:
- the name and mailing addresses of both parties;
- an itemization of all services to be provided;
- the value of the services to be provided;
- the rate and method of compensation;
- the payment date or the mechanism to determine it; and
- the date by which the freelance worker must submit a list of services rendered.
FIFA also requires that compensation be paid to a freelance worker either (i) on or before the date specified in the contract or (ii) if no date is specified, within 30 days of the completion of the services. Once a freelance worker has commenced performance under the contract, hiring parties cannot make timely payment conditional on reducing the agreed upon compensation. If a hiring party fails to pay a freelance worker in accordance with the contract, the freelance worker can recover double damages, injunctive relief, and attorneys' fees and costs.
FIFA further prohibits hiring parties from retaliating against freelance workers for exercising or attempting to exercise their rights under the law or for obtaining any future work opportunity because they have done so. If a hiring party retaliates against a freelance worker, the freelance worker can recover statutory damages equal to the value of the contract for each violation, injunctive relief, and attorneys' fees and costs.
Recommendations
To prepare for the implementation of FIFA, we recommend employers review their current and potential use of freelance workers/independent contractors to ensure that all such workers are properly classified, update their contracts with freelancers to include all the required terms under FIFA, and provide clear and fair payment terms and mechanisms.
This article is presented for informational purposes only and is not intended to constitute legal advice.